NEW YORK (CNN/Money) -
Signs of further weakness in the labor market sent stocks lower early Thursday, a shortened trading day ahead of the Fourth of July holiday weekend.
The Dow Jones industrial average (down 56.52 to 9086.32, Charts), the Standard & Poor's 500 (down 5.88 to 987.87, Charts) index and the Nasdaq composite (down 9.31 to 1669.42, Charts) all posted declines in the first five minutes of trading. Markets close at 1 p.m. today and are closed Friday due to the holiday.
The unemployment rate rose to 6.4 percent in June from 6.1 percent in May, the Labor Department reported. It was above the 6.2 percent figure economists surveyed by Reuters were forecasting. Employers cut 30,000 jobs from their payrolls last month after cutting a revised 70,000 jobs the previous month. Economists were expecting no change in payrolls.
In addition, the number of Americans filing new weekly claims for unemployment grew to 430,000 from a revised 409,000 the week before. The number exceeded estimates. A number above 400,000 is generally seen as a sign of a deteriorating labor market.
Stocks have rallied for nearly 4 months at least partly on the belief that a sustained economic recovery is in the pipeline despite only limited evidence to support such hopes. In this environment, investors have largely been able to shrug off negative news that would seem to contradict recovery hopes. But Thursday's weak jobs reports sent stocks lower.
Stocks may have also been inclined to slide early Thursday in a bout of unsurprising consolidation after Wednesday's rally. Trading could potentially be choppy during the shortened session, as many market participants check out early ahead of the holiday.
Selling was fairly broad, with 28 out of 30 Dow stocks opening lower.
In corporate news, business software maker Siebel Systems (SEBL: up $0.16 to $9.62, Research, Estimates) warned its second-quarter results will miss current expectations, due to order delays caused by the weak economy. Shares fell 1.5 percent in the early going.
European markets gained at midday, while Asian stocks ended mostly higher Thursday.
Treasury prices barely declined in early trading, sending the 10-year note yield up to 3.54 percent. The dollar gained against the yen and euro.
Brent oil futures rose 30 cents to $28.22 a barrel in London. Gold fell 10 cents to $351.50 in London.